Bargain Sale To A Charitable Organization

AAA

DEFINITION of 'Bargain Sale To A Charitable Organization'

The sale of a good or service to a charitable organization for less than the fair market value of the good or service received.

Bargain sales are often used by donors who wish to make a charitable donation to an organization in a form other than cash. In some cases, the property transferred is exchanged for other similar property of lesser value, and the difference is considered a gift.

INVESTOPEDIA EXPLAINS 'Bargain Sale To A Charitable Organization'

If the property being sold has appreciated in value, the cost basis must be divided proportionately between the portion of the property that is actually sold and the remainder that is donated. The gain on the portion of the property that is sold must then be reported as income. The donation portion is written off, within the limits of charitable contributions for appreciated property.

RELATED TERMS
  1. Fire Sale

    Selling goods or assets at heavily discounted prices. Fire sale ...
  2. Private Foundation

    A charitable organization that, while serving a good cause, does ...
  3. Qualified Charitable Organization

    A nonprofit organization that qualifies for tax-exempt status ...
  4. Distressed Sale

    When property, stocks or other assets are sold in an urgent manner, ...
  5. Sale

    1) In general, a transaction between two parties where the buyer ...
  6. Wealth Management

    A high-level professional service that combines financial/investment ...
RELATED FAQS
  1. How does a revocable trust become a split-interest trust?

    A revocable trust is set up during the lifetime of the grantor who begins the trust. The grantor has the right to modify ... Read Full Answer >>
  2. In which countries do high-income earners pay the most tax?

    It is difficult to identify those countries with the highest tax burdens on high net worth individuals. The most commonly ... Read Full Answer >>
  3. In which US cities do high-income earners pay the most tax?

    There are several different ways that cities tax high-net-worth (HNWIs) individuals. The most direct and obvious method is ... Read Full Answer >>
  4. Which states are the most expensive for high-income earners?

    The most expensive states for high-income earners are California, Hawaii and New York. The tax rates assessed by these states ... Read Full Answer >>
  5. What are the risks involved in a banker's acceptance?

    College savings accounts are excellent ways to encourage saving for future college costs. Contact your investment professional ... Read Full Answer >>
  6. Should I purchase a master limited partnership (MLP) in my retirement account?

    Most investors should not purchase units in a master limited partnership, or MLP, in their retirement accounts. MLPs offer ... Read Full Answer >>
Related Articles
  1. Taxes

    Cut Your Tax Bill With Donor-Advised Funds

    Beat the tax man come April 15 by investing in a charity-friendly fund.
  2. Taxes

    Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.
  3. Retirement

    Gifting Your Retirement Assets To Charity

    There are several things to consider when it comes to this type of charitable giving. Make sure you're well informed.
  4. Retirement

    Top Reasons Not to Roll Over Your 401(k) to an IRA

    Five cases in which keeping your plan in place – or employing another non-IRA strategy – is the better move.
  5. Taxes

    Top Tax Tips to Deduct Investment Management Fees

    Investment expenses can be deducted by those who meet three main criteria. Here's what they are and how they work.
  6. Investing Basics

    Understanding the Capital Gains Tax

    A capital gains tax is imposed on the profits realized when an investor or corporation sells an asset for a higher price than its purchase price.
  7. Taxes

    5 Warning Signs a Charity Is a Scam

    Giving to charities and helping those in need is admirable. Here's how to ensure your good intentions and donations aren't siphoned off by scammers.
  8. Retirement

    5 Reasons to Convert a Roth To a Traditional IRA

    Here's a quintet of cases when the traditional IRA trumps the Roth version.
  9. Professionals

    How Advisors Can Tackle the Big Wealth Transfer

    The massive wealth transfer from Baby Boomers to their heirs presents opportunity and challenges for advisors. Here's how they can tackle the challenges.
  10. Professionals

    Does that Budget Leave Room for Charitable Giving?

    Your clients want to be philanthropic, but does their financial situation allow them to afford charitable giving?

You May Also Like

Hot Definitions
  1. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  2. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  4. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  5. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  6. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!